AYUB ALI, CHURU V. PCIT-3, JAIPUR

ITA 262/JPR/2020

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 4262 (ITAT-JAIPUR)
• Duration Of Justice: 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 18-05-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MUKESH VERMA
• Keywords: Revision of order; Depreciation; Opportunity of being heard; Audit objection; Principle of natural justice; Source of fund; Assessment record; Set aside; FORM 26AS
• Section: 263; 63; 40A(3); 143(3); 142(1); 251; 13; 20

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S,B JAIPUR JH LAANHI XKSLKBZ] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI VIKRAM SING H YADAV, AM VK;DJ VIHY LA-@ ITA. NO. 262/JP/2020 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2015-16 SH. AYUB ALI BUS STAND ROAD, RATANGARH, CHURU. CUKE VS. THE PR.CIT-3, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ABNPA1065 B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI P.C. PARWAL (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI MUKESH VERMA (CIT) A LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 17/12/2020 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 15/02/2021 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER OF LD. PR.CIT(A)-III, JAIPUR DATED 17.03.2020 PERTAINING T O ASSESSMENT YEAR 2015-16 WHEREIN THE ASSESSEE HAS TAKEN THE FOLLOWIN G GROUNDS OF APPEAL:- 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, ORDER PASSED BY THE LD. PCIT U/S 263 IS ILLEGAL & BAD IN LAW AND THE SAME BE QUASHED. 2. THE LD. PCIT HAS ERRED ON FACTS AND IN LAW IN DI RECTING THE AO TO PASS THE ORDER DENOVO IGNORING THAT THE CASE OF ASSESSEE WAS SELECTED FOR LIMITED SCRUTINY AND THE ISSUES RAISE D IN SECTION 263 ITA NO. 262/JP/2020 SH. AYUB ALI VS. PR.CIT 2 NOTICE WAS NOT ONLY VERIFIED BY THE AO BUT ALSO EXP LAINED BEFORE THE PCIT ON WHICH NO ADVERSE FINDING WAS GIVEN. 2. DURING THE COURSE OF HEARING, THE LD AR SUBMITTE D THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PROVIDING DI AGNOSTIC SERVICES IN THE NAME OF M/S EMKAY MEDICARE SERVICES. RETURN WAS FILED ON 30.09.2015 AT TOTAL INCOME OF RS. 84,91,160/-. THE CASE OF ASSESSEE WAS SELECTED FOR LIMITED SCRUTINY FOR 2 REASONS, I. E. (I) LARGE OTHER EXPENSES CLAIMED IN THE P&L A/C (II) MISMATCH OF SA LES TURNOVER REPORTED IN THE AUDIT REPORT AND ITR. IN COURSE OF ASSESSMENT PROCEEDINGS AO VERIFIED THE VARIOUS EXPENSES DEBITE D TO P&L A/C PARTICULARLY THE EXPENDITURE CLAIMED UNDER THE HEAD DISCOUNT ON CT AND MRI TEST TO BPL& OTHERS (PBM). ASSESSEE EXPLAINED T HE SAME AS PER THE LETTER PLACED AT PB 42-43. THE AO AFTER CONSIDERING THE SAME AND EXAMINING THE OTHER EXPENSES MADE ADDITION OF RS. 2 0,74,797/- U/S 40A(3) AND RS.1 LACS OUT OF THE VARIOUS EXPENSES DE BITED TO P&L A/C AND THUS COMPLETED THE ASSESSMENT AT INCOME OF RS.1 ,06,65,957/-. 3. AGAINST THE ASSESSMENT ORDER ASSESSEE FILED APPE AL BEFORE THE LD. CIT(A) WHO VIDE ORDER DATED 31.01.2019 IN APPEAL NO .354/18-19 DELETED BOTH THE ADDITIONS/ DISALLOWANCES MADE BY T HE AO. THE LD. CIT ON THE BASIS OF AUDIT OBJECTION ISSUED NOTICE U/S 2 63 OF THE ACT AS REPRODUCED IN HIS ORDER WHEREIN HE OBSERVED THAT AO HAS (I) NOT VERIFIED THE RECEIPT AS REFLECTED IN FORM 26AS (II) NOT VERI FIED THE DISCOUNT CLAIMED ON ACCOUNT OF FREE SERVICES GIVEN TO BPL AN D OTHER AS PER THE CONTRACT ENTERED WITH THE GOVERNMENT OF RAJASTHAN B Y CALLING THE REQUIRED DOCUMENT AND (III) NOT SCRUTINIZE THE FINA L ACCOUNTS SUBMITTED ITA NO. 262/JP/2020 SH. AYUB ALI VS. PR.CIT 3 BEFORE THE AO. THEREFORE, THE ORDER PASSED BY AO IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. 4. THE ASSESSEE IN RESPONSE TO SHOW CAUSE NOTICE VI DE ITS LETTER DATED 16.03.2020 SUBMITTED THAT IN COURSE OF ASSES SMENT PROCEEDINGS, ASSESSEE PRODUCED COMPLETE BOOKS OF ACCOUNTS FOR VE RIFICATION WHICH WAS EXAMINED BY THE AO AFTER WHICH CERTAIN DISALLOW ANCE WAS MADE. THIS IS ACCEPTED BY THE AO AT PARA 3 OF THE ASSESSM ENT ORDER WHERE HE HAS MENTIONED THAT ON EXAMINATION OF BOOKS OF ACCOU NTS AND OTHER DOCUMENTS AS PRODUCED BY THE ASSESSEE DURING THE AS SESSMENT PROCEEDINGS, IT IS SEEN THAT ASSESSEE HAS MADE PAYM ENT FOR .. FURTHER IN PARA 4.2 IT IS MENTIONED THAT ON VERIFI CATION IT WAS NOTICED THAT CERTAIN EXPENSES LIKE ... THUS, THE AO HAS EXAMINED AND VERIFIED BOOKS OF ACCOUNTS, BILLS & VOUCHERS AND TH EREAFTER COMPLETED THE ASSESSMENT. HE HAS ALSO EXAMINED THE CONTRACT E NTERED BY THE ASSESSEE WITH RAJASTHAN MEDICARE RELIEF SOCIETY, PB M HOSPITAL, BIKANER IN VERIFICATION OF THE DISCOUNT CLAIMED IN P&L A/C. APART FROM THIS EXPLANATION REGARDING RECEIPT OF RS.1,49,65,860/- R ECEIVED FROM RAJASTHAN MEDICARE RELIEF SOCIETY WITH REFERENCE TO ITS INCLUSION IN THE RECEIPT DECLARED BY THE ASSESSEE AND EXPLANATION WI TH REGARD TO THE DISCOUNT ON ACCOUNT OF FREE SERVICES PROVIDED TO BP L AND OTHER PATIENTS AS PER CLAUSE 7 OF THE AGREEMENT WAS EXPLAINED. IT IS ALSO SUBMITTED THAT ONCE THE ASSESSMENT ORDER IS SUBJECT MATTER OF APPEAL THE SAME IS NOT AMENABLE TO PROCEEDINGS U/S 263. THUS, IT IS CO NTENDED THAT AO PASSED THE ORDER AFTER COMPLETE VERIFICATION/ENQUIR Y AND ORDER PASSED BY HIM IS NOT ERRONEOUS OR PREJUDICIAL TO THE INTER EST OF REVENUE. ITA NO. 262/JP/2020 SH. AYUB ALI VS. PR.CIT 4 5. THE LD. CIT, HOWEVER, AT PG 9-11 OF THE ORDER HE LD THAT PROCEEDINGS U/S 263 EVEN WHEN THE ASSESSMENT ORDER IS SUBJECT MATTER OF APPEAL IS VALID IN VIEW OF CLAUSE (C) OF EXPLANA TION 1 TO SECTION 263. THE AO HAS NOT EXAMINED THE RECEIPT OF RS.1,49,65,8 60/- AND HAS ALSO NOT EXAMINED THAT EXPENDITURE OF RS.1,19,35,260/- F OR DISCOUNT ON CT/MRI TEST FOR BPL & OTHERS WHEN ALL THE RELEVANT EXPENDITURE IS ALREADY CLAIMED IN THE P&L A/C. ACCORDINGLY, BY REF ERRING CLAUSE (A) & (B) OF EXPLANATION 2 TO SECTION 263 HE SET ASIDE TH E ORDER OF AO TO PASS THE SAME DENOVO AFTER MAKING NECESSARY EXAMINATION AND VERIFICATION. 6. IN THE AFORESAID BACKGROUND, IT WAS SUBMITTED BY THE LD. AR THAT THE CASE OF THE ASSESSEE WAS PICKED UP FOR LIMITED SCRUTINY TO VERIFY THE LARGE OTHER EXPENSES CLAIMED IN THE P&L A/C AND MIS MATCH OF SALES TURNOVER REPORTED IN AUDIT REPORT AND ITR. BOTH THE SE ISSUES WERE EXAMINED BY THE AO WITH REFERENCE TO BOOKS OF ACCOU NTS AND BILLS AND VOUCHERS PRODUCED BEFORE HIM. IT MAY BE NOTED THAT THE CASE OF ASSESSEE WAS SELECTED FOR LIMITED SCRUTINY AND AS P ER CBDT INSTRUCTION NO.20/2015 DATED 29.12.2015 IT IS SPECIFICALLY MENT IONED THAT IN CASE OF LIMITED SCRUTINY, QUESTIONNAIRE U/S 142(1) OF THE ACT SHALL REMAIN CONFINED TO SPECIFIC REASONS/ ISSUES FOR WHICH CASE HAS BEEN PICKED UP FOR SCRUTINY. ONLY WHEN THE AO NOTICES THAT THERE I S POTENTIAL ESCAPEMENT OF INCOME EXCEEDING RS.5 LACS THEN THE C ASE MAY BE TAKEN FOR COMPLETE SCRUTINY. HOWEVER, ON VERIFICATION OF THE ISSUES TAKEN UP FOR LIMITED SCRUTINY, AO HAS NOT FOUND ANYTHING INC ORRECT AND THEREFORE, THERE WAS NO REASON FOR HIM TO ASK FOR COMPLETE SCR UTINY THOUGH ON VERIFICATION OF THE EXPENDITURE CLAIMED IN THE P&L A/C HE HAS MADE DISALLOWANCE. THUS, THE ORDER OF AO SO FAR AS HIS A MBIT UNDER THE ITA NO. 262/JP/2020 SH. AYUB ALI VS. PR.CIT 5 LIMITED SCRUTINY IS CONCERNED CANNOT BE HELD TO BE ERRONEOUS OR PREJUDICIAL TO THE INTEREST OF REVENUE. 7. IT WAS SUBMITTED THAT THE LD. PCIT HAS OBSERVED THAT AO HAS NOT EXAMINED THE EXPENDITURE OF RS.1,19,35,260/- CLAIME D ON ACCOUNT OF DISCOUNT ON CT/MRI TEST WHEREAS ALL RELEVANT EXPEND ITURE PERTAINING TO SUCH TEST HAS BEEN CLAIMED IN THE P&L A/C. FURTHER THE AO HAS NOT VERIFIED TO WHOM FREE SERVICES HAS BEEN RENDERED RE LATING TO MRI & CT SCAN TEST CLAIMED AS PER THE CONTRACT ENTERED WITH RAJASTHAN MEDICARE SERVICES BY CALLING THE REQUIRED DOCUMENTS. THESE O BSERVATIONS ARE NOT CORRECT. IN COURSE OF ASSESSMENT PROCEEDINGS ASSESS EE AT POINT NO.1 OF HIS REPLY EXPLAINED THAT HE IS PROVIDING THE CT/MR I TEST SERVICES AS PER THE AGREEMENT ENTERED WITH PBM HOSPITAL, A COPY OF WHICH WAS FILED. IT WAS ALSO EXPLAINED THAT AS PER THE AGREEMENT CERTAI N CATEGORY OF PATIENTS ARE TO BE PROVIDED FREE SERVICES FOR WHICH DISCOUNT IS CLAIMED IN THE P&L A/C. THUS, THIS ISSUE IS ALSO EXAMINED BY T HE AO. IN THE PROCEEDINGS U/S 263 OF THE ACT THE ASSESSEE FURTHE R EXPLAINED THAT AS PER CLAUSE 7 OF THE AGREEMENT, 20% OF TOTAL MRI/CT SCAN TEST ARE TO BE PROVIDED FREE OF COST TO THE PATIENTS OF BPL AND OT HER FREE CATEGORY PATIENTS. FOR THESE FREE SERVICES ASSESSEE IS FIRST RECORDING THE INCOME AND THEN THE INCOME RECORDED ON ACCOUNT OF FREE SER VICES IS DEBITED TO P&L A/C AS DISCOUNT. IN SUPPORT OF THE SAME THE WOR KING OF DISCOUNT ALONG WITH THE LEDGER ACCOUNT OF CT SCAN/ MRI SERVI CES RECEIPT, LEDGER ACCOUNT OF PBM HOSPITAL, BIKANER AND LEDGER ACCOUNT OF DISCOUNT AND CT/ MRI TEST WAS PROVIDED. THE LD. CIT HAS NOT FOUN D ANYTHING ADVERSE IN THE SAME AND THEREFORE, ON THIS ISSUE THE ORDER PASSED BY AO CANNOT BE HELD TO BE ERRONEOUS OR PREJUDICIAL TO THE INTER EST OF REVENUE. ITA NO. 262/JP/2020 SH. AYUB ALI VS. PR.CIT 6 8. IT WAS FURTHER SUBMITTED THAT LD. PCIT HAS ALSO OBSERVED THAT AO HAS NOT EXAMINED THE RECEIPT OF RS. 1,49,65,860/- R EFLECTED IN FORM 26AS. IN ASSESSMENT PROCEEDINGS, SINCE THE GROSS RE CEIPT DECLARED BY THE ASSESSEE WAS RS. 6,14,24,700/- AS AGAINST RECEI PT OF RS.1,49,65,860/- REFLECTED IN FORM 26AS, THERE WAS NOTHING FOR THE AO TO ENTERTAIN ANY DOUBT ON THE RECEIPT DECLARED BY A SSESSEE. FURTHER IN SEC. 263 PROCEEDINGS IT HAS BEEN CLARIFIED THAT FOR M NO.26AS ONLY REFLECTS RECEIPT OF RS.1,49,65,890/- FROM RAJASTHAN MEDICARE RELIEF SOCIETY WHICH IS A PART OF THE GROSS RECEIPT DECLAR ED. THE RECONCILIATION OF SUCH RECEIPT WITH REFERENCE TO LEDGER ACCOUNT OF PBM HOSPITAL AND CT/ MRI SCAN RECEIPT WAS FILED. NOTHING ADVERSE WAS FOUND BY THE PCIT IN THE SAME. HENCE, ON THIS ACCOUNT THE ORDER PASSE D BY AO CANNOT BE HELD TO BE ERRONEOUS OR PREJUDICIAL TO THE INTEREST OF REVENUE. THE LD. PCIT HAS DIRECTED THE AO TO PASS THE ASSESSMENT ORD ER AFRESH IGNORING THAT WHEN THE CASE IS SELECTED FOR LIMITED SCRUTINY THE JURISDICTION OF CIT FOR HOLDING THE ORDER ERRONEOUS OR PREJUDICIAL TO T HE INTEREST OF REVENUE IS CONFINED ONLY TO THE ISSUE OF LIMITED SCRUTINY A ND NOT TO DIRECT THE AO TO PASS A DENOVO ASSESSMENT AFRESH BY RAISING ISSUE S BEYOND WHAT IS PERMITTED IN THE LIMITED SCRUTINY. HENCE, THE DIREC TION GIVEN BY LD. CIT IS ALSO BAD IN LAW. 9. IT WAS SUBMITTED THAT THE CASE OF ASSESSEE WAS S ELECTED FOR LIMITED SCRUTINY FOR THE REASON OF LARGE OTHER EXPE NSES CLAIMED IN THE P&L A/C. THE AO HAS EXAMINED THE EXPENSES CLAIMED I N P&L A/C AND MADE CERTAIN DISALLOWANCES. THESE DISALLOWANCES WER E SUBJECT MATTER OF APPEAL. THUS, THE LD. CIT(A) HAS POWER U/S 251 O F THE ACT TO ITA NO. 262/JP/2020 SH. AYUB ALI VS. PR.CIT 7 ENHANCE THE ASSESSMENT NOT ONLY ON THE ISSUES FOR W HICH DISALLOWANCE WAS MADE BY AO BUT TO ALL EXPENSES DEBITED IN P&L A /C. HONBLE GUJARAT HIGH COURT IN CASE OF CIT VS. AHMEDABAD CRU CIBLE CO. 206 ITR 574 HAS HELD THAT POWERS OF THE AAC ARE NOT CONFINE D TO THE SUBJECT MATTER OF APPEAL BUT EXTEND TO THE SUBJECT MATTER O F ASSESSMENT. HONBLE SUPREME COURT IN CASE OF CIT VS. NIRBHERAM DELURAM 91 TAXMANN 181 HAS HELD THAT APPELLATE POWERS CONFERRE D ON AAC IS NOT CONFINED TO THE MATTER WHICH HAS BEEN CONSIDERED BY THE ITO AND THUS, ADDITIONS MADE BY THE AAC ON ACCOUNT OF UNEXPLAINED HUNDI LOANS WHICH HAD NOT BEEN CONSIDERED BY ITO WOULD BE JUSTI FIED. THUS, THE POWER OF CIT(A) FOR ENHANCEMENT EXTEND TO ALL THE I SSUES CONSIDERED BY THE AO THOUGH HE HAS NO POWER TO ENHANCE THE ASSESS MENT BY DISCOVERING NEW SOURCES OF INCOME. IN THE PRESENT C ASE, THE LD. CIT(A) HAS DECIDED THE APPEAL OF ASSESSEE ON THE DISALLOWA NCE OF EXPENSES CLAIMED IN THE P&L A/C AND THEREFORE, WITH REFERENC E TO THE EXPENSES THE ORDER OF AO HAS MERGED WITH THAT OF THE CIT(A) AND THEREFORE, THE CIT CANNOT INVOKE THE REVISIONARY JURISDICTION U/S 263 BY TAKING SHELTER TO EXPLANATION (C) TO SECTION 263(1). 10. IT WAS ALSO SUBMITTED THAT IN THE PRESENT CASE NOTICE U/S 263 HAS BEEN ISSUED ON ACCOUNT OF THE AUDIT OBSERVATIONS RA ISED BY THE AUDIT TEAM. THIS FACT HAS NOT BEEN DISPUTED. SUGGESTION B Y AUDIT PARTY CANNOT FORM THE BASIS OF REVISION AS HELD BY HONBLE CALCU TTA HIGH CASE OF JEEWAN LAL LTD. VS. ADDL. CIT 108 ITR 407. HENCE, O N THIS GROUND ITSELF THE ORDER PASSED U/S 263 IS ILLEGAL AND BAD IN LAW. ITA NO. 262/JP/2020 SH. AYUB ALI VS. PR.CIT 8 11. IT WAS ACCORDINGLY SUBMITTED THAT THE LD. PCIT HAS REFERRED TO CLAUSE (A) & (B) TO EXPLANATION 2 TO SECTION 263(1) TO JUSTIFY THE ORDER PASSED BY HIM. THESE CLAUSES ARE APPLICABLE WHERE O RDER IS PASSED WITHOUT ENQUIRIES OR VERIFICATION WHICH SHOULD HAVE BEEN MADE. IN THE PRESENT CASE, THE ENQUIRIES AND VERIFICATION REQUIR ED WITH REFERENCE TO EXPENSES CLAIMED IN THE P&L A/C HAS BEEN MADE BY TH E AO. THEREFORE, THESE CLAUSES ARE NOT ATTRACTED TO THE FACTS OF ASS ESSEES CASE. RELIANCE WAS PLACED ON THE FOLLOWING DECISIONS:- TORRENT PHARMACEUTICALS LTD. VS. DCIT (2018) 173 IT D 130 (AHD.) AMIRA PURE FOODS PVT. LTD. VS. PCIT (2017) 63 ITR(T RIB.) 355 BABY MEMORIAL HOSPITAL LTD. VS. ACIT 111 TAXMANN.CO M 189. 12. PER CONTRA, THE LD. CIT/DR VEHEMENTLY ARGUED TH E MATTER AND TAKEN US THROUGH THE FINDINGS OF LD PR CIT WHICH RE ADS AS UNDER:- 5. I HAVE CONSIDERED THE FACTS AND CIRCUMSTANCES O F THE CASE AND ALSO EXAMINED THE CASE RECORDS ALONG WITH WRITTEN S UBMISSION FILED BY THE ASSESSEE BEFORE ME. HERE IT IS ALSO MENTIONED THAT U/S 263 OF THE INCOM E TAX ACT THE COMMISSIONER MAY CALL FOR AND EXAMINE THE RECORD OF ANY PROCEEDING UNDER THIS ACT, AND IF HE CONSIDERS THAT ANY ORDER PASSED THEREIN BY THE ASSESSING OFFICER IS ERRONEOU S IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, HE, MAY, AFTER GIVING THE ASSESSEE AND OPPORTUNITY OF BEING HEARD AND AFT ER MAKING OR CAUSING TO BE MADE SUCH INQUIRY AS HE DEEMS NECESSA RY, PASS SUCH ORDER THEREON AS THE CIRCUMSTANCES OF THE CASE JUSTIFY, INCLUDING AN ORDER ENHANCING OR MODIFYING THE ASSES SMENT FOR CANCELLING THE ASSESSMENT AND DIRECTING AS FRESH AS SESSMENT. ACCORDINGLY, THE RECORDS OF THE ASSESSEE WERE CALLE D FOR AN ITA NO. 262/JP/2020 SH. AYUB ALI VS. PR.CIT 9 EXAMINED WITH ALL MATERIAL AVAILABLE THEREIN FOR FO RMING AN INFORMED OPINION IN THE CASE. AT THE OUTSET THE AR OF THE ASSESSEE HAS MENTIONED IN BRIEF THE SHOW CAUSE NOTICE AS ISSUED BY THIS OFFICE AND SUBM ITTED THAT THE AO EXAMINED ALL THE ISSUES WHILE COMPLETING THE ASSESSMENT ORDER. HOWEVER, THIS SUBMISSION OF THE AR OF THE AS SESSEE IS NOT ACCEPTABLE. THE AR OF THE ASSESSEE ALSO SUBMITTED T HAT THE APPEAL IN THIS CASE HAS BEEN DECIDED ON 31.01.2019 ALLOWING PART RELIEF TO HIS ASSESSEE AND THESE ISSUES CANNOT BE FURTHER EXAMINED U/S 263 OF THE INCOME TAX ACT, 1961. HOWEV ER, FROM THE RECORDS OF THIS OFFICE, IT IS SEEN THAT THE ASS ESSEE WENT IN FOR APPEAL BEFORE CIT (A) ON THE ISSUE OF DISALLOWANCE MADE U/S 40A(3)OF THE ACT AND LUMP SUM ADDITION OF RS. 1,00, 000/- OUT OF `OTHER EXPENSE' LIKE ADVERTISEMENT EXPENSES, FUEL, GEN-SET EXPENSES, LEGAL EXPENSES, MAINTENANCE EXPENSES, MIS C. OFFICE EXPENSES, SALE PROMOTION EXPENSES, STATIONERY & PRI NTING EXPENSES. THEREFORE, IT IS APPARENT THAT CIT(A) HAS NOT DECIDED ANY OF THE ISSUE ON WHICH NOTICE U/S 263 OF THE ACT HAS BEEN ISSUED BY THE UNDERSIGNED. ON THIS MATTER ASSESSEE S ATTENTION IS DRAWN TO PARA (C) OF EXPLANATION 1 OF SECTION 263(1 ) OF THE ACT WHEREIN IT IS CATEGORICALLY MENTIONED THAT 'WHERE A NY ORDER REFERRED TO IN THIS SUB-SECTION AND PASSED BY THE A SSESSING OFFICER HAD BEEN SUBJECT MATTER OF ANY APPEAL [FILE D ON OR BEFORE OR AFTER THE 1ST DAY OF JUNE, 1988], THE POWERS OF THE [PRINCIPAL COMMISSIONER OR] COMMISSIONER UNDER THIS SUB-SECTIO N SHALL EXTEND [AND SHALL BE DEEMED TO HAVE EXTENDED] TO SU CH MATTER AS HAD NOT BEEN CONSIDERED AND DECIDED IN SUCH APPE AL.' SINCE THE MATTER FOR WHICH PROCEEDINGS U/S 263 OF THE ACT HAS BEEN INITIATED CANNOT BE IN QUESTION IN APPEAL AS THE AO HAS ALLOWED INCORRECT DEDUCTION TO THE ASSESSEE AND WHAT HAS BE EN INCORRECTLY ALLOWED BY THE AO IN ASSESSEES FAVOUR CANNOT BE IN QUESTION BEFORE CIT(A). THEREFORE, THE PROCEEDINGS U/S 263 O F THE ACT HAS RIGHTFULLY BEEN INITIATED. AS REGARDS, ASSESSEES A LLEGED STATEMENT IN HIS ARS WRITTEN SUBMISSION DATED 16.03.2020 THA T THE AO HAS ITA NO. 262/JP/2020 SH. AYUB ALI VS. PR.CIT 10 EXAMINED THE CASE AND MADE PROPER ENQUIRIES IS ALSO NOT CORRECT. THE AO HAS NOT EXAMINED THE RECEIPTS OF RS. 1,49,65 ,860/- REFLECTING IN 26AS AND HAS ALSO NOT EXAMINED ALL TH E EXPENDITURE DEBITED IN P&L ACCOUNT AMOUNTING TO RS. 1,19,35,260 /- FOR DISCOUNT ON CT TEST, MRI TEST FOR BPL AND OTHERS AS ALL RELEVANT EXPENDITURE PERTAINING TO MAINTENANCE OF CT SCAN AN D MRI MACHINE, LASER IMAGE FILM, REPORTING FEES ON TEST, ELECTRICITY AND WATER EXPENSES, DEPRECIATION. NONE OF THE ISSUE WAS SUBJECT MATTER OF APPEAL AS CLAIMED BY THE ASSESSEE. 6. WHILE HOLDING SO, AO FAILED TO TAKE NOTE OF VARI OUS OTHER FACTS WHICH WERE AVAILABLE ON RECORD. SOME OF THE R ELEVANT FACTS RELATING TO THE ISSUE IN HAND ARE SUMMARIZED AS BEL OW. 1. THE AO HAS NOT VERIFIED THE RECEIPTS AS REFLECTI NG IN FORM 26AS FOR THE YEAR UNDER CONSIDERATION AS PERUSAL OF RECO RDS SHOW THAT WHAT THE ASSESSEE HAS PRODUCED DURING THE HEARING O F PROCEEDINGS U/S 263 OF THE ACT WERE NOT AT ALL SUBM ITTED BEFORE THE AO AND THE AO HAS NOT CALLED FOR THE RELEVANT D ETAILS PERTAINING TO THIS ISSUE. 2. THE AO HAS NOT VERIFIED THE VARIOUS DISCOUNTS CL AIMED AS TO WHETHER GOVERNMENT OF RAJASTHAN I.E. RAJASTHAN MECI CARE SERVICES. 3. THE AO HAS NOT VERIFIED AS TO WHOM FREE SERVICES HAVE BEEN RENDERED RELATED TO MRI AND CT SCAN TEST IN F.Y. 20 14-15. 4. THE AO HAS NOT CALLED FOR THE REQUIRED DOCUMENTS AND HAS NOT SCRUTINIZED THE FINAL ACCOUNTS PRESENTED BEFORE HIM /HER. 7. THIS OMISSION AS MADE BY THE ASSESSING OFFICER RESULTING IN AN ORDER WHICH IS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENUE. IT HAS NECESSITATED THE INITIATION OF P ROCEEDINGS UNDER SECTION 263 OF THE INCOME TAX ACT. THIS ORDER HAS BEEN ITA NO. 262/JP/2020 SH. AYUB ALI VS. PR.CIT 11 DONE IN A VERY MECHANICAL WAY. THIS ACTION OF THE A O HAS RESULTED IN AN ERRONEOUS PASSING OF ASSESSMENT ORDE R U/S 143(3) OF INCOME TAX ACT, 1961 WHICH REQUIRED HIGH LEVEL O F CARE WHILE FINALZING ASSESSMENT ORDER. THE ORDER DATED 29.09.2 017 U/S 143(3) PASSED BY THE AO IS CLEARLY PREJUDICIAL TO T HE INTEREST OF REVENUE AND CLEARLY CALLS FOR INVOCATION OF SECTION 263 OF THE INCOME TAX ACT, 1961. 8. KEEPING THE ABOVE DISCUSSION IN VIEW BY THE VIR TUE OF THE POWERS CONFERRED ON THE UNDERSIGNED UNDER THE PROVI SIONS OF SECTION 263 OF THE IT ACT 1961 I HOLD THAT THE ORDE R UNDER 143(3) DATED 29/09/2017 FOR ASSESSMENT YEAR 2015-16 PASSED BY THE ASSESSING OFFICER IS ERRONEOUS INSOFAR AS IT IS PRE JUDICIAL TO THE INTEREST OF REVENUE AS THE ORDER HAS BEEN PASSED BY THE ASSESSING OFFICER IN A ROUTINE AND PERFUNCTORY MANN ER BY WITHOUT APPLICATION OF MIND. IT IS THEREFORE LIABLE TO REVI SION UNDER EXPLANATION (2) CLAUSE (A) & (B) OF SECTION 263 OF THE INCOME TAX ACT. THEREFORE HOLDING THAT THE ORDER DATED 29.09.2 017 BEING ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENU E IS SET ASIDE ON THE ISSUE WITH A DIRECTION TO THE ASSESSING OFFI CER TO PASS THE SAME IN THE CASE OF THE ASSESSEE DE NOVO IN ACCORDA NCE WITH LAW AFTER MAKING THE NECESSARY EXAMINATION AND VERIFICA TION REGARDING THE ISSUES UNDER DISCUSSION .THE AO IS DI RECTED TO FINALIZE THE ASSESSMENT ORDER KEEPING IN VIEW THE F ACTS OF THE CASE AND CORRECT APPLICATION OF LAW. HOWEVER AN OPP ORTUNITY TO THE ASSESSEE TO STATE ITS CASE IS TO BE ALLOWED IN THE INTEREST OF NATURAL JUSTICE. 13. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. FIRSTLY, WE REFER TO THE CONTE NTION ADVANCED BY THE LD. AR THAT THIS IS A CASE OF LIMITED SCRUTINY AND THEREFORE, THE DIRECTIONS GIVEN BY THE LD. PR.CIT TO PASS A DENOVO ASSESSMENT AFRESH BY RAISING ISSUES BEYOND WHAT IS PERMITTED IN THE LIMITED SCRU TINY IN BAD IN LAW. IN THIS REGARD, WE FIND THAT THE CASE OF THE ASSESSEE WAS SELECTED FOR ITA NO. 262/JP/2020 SH. AYUB ALI VS. PR.CIT 12 LIMITED SCRUTINY FOR THE REASONS OF LARGE OTHER EX PENSES CLAIMED IN THE PROFIT & LOSS ACCOUNT AND MISMATCH OF SALES TURNOVE R REPORTED IN THE AUDIT REPORT AND ITR. IN THE SHOW CAUSE NOTICE ISSU ED U/S 263 OF THE ACT, THE LD. PR. CIT HAS STATED THAT FORM 26AS REVE ALS THAT THE LICENSOR HAS PAID AN AMOUNT OF RS. 1,49,65,860/- WHICH IS NO T INCLUDED IN THE TOTAL TURNOVER OF THE ASSESSEE. FURTHER, IT HAS BEE N STATED THAT THE ASSESSEE HAS CLAIMED EXPENDITURE OF RS. 1,19,35,260 /- IN ITS PROFIT AND LOSS ACCOUNT TOWARDS DISCOUNT ON CT TEST AND MRI TE ST WHICH IS NOT ALLOWABLE AS ALL THE RELEVANT EXPENDITURE PERTAININ G TO THIS TESTS HAVE BEEN CLAIMED SEPARATELY BY THE ASSESSEE IN ITS PROF IT AND LOSS ACCOUNT. THEREAFTER, WE REFER TO THE FINDINGS OF THE LD. PR. CIT WHICH ARE CONTAINED AT PARA 6 OF HIS ORDER WHICH ARE AGAIN TA LKING ABOUT NON VERIFICATION OF RECEIPTS AS REFLECTING IN FORM 26AS AND NON VERIFICATION OF DISCOUNT CLAIMED BY THE ASSESSEE AS WELL AS THE CON NECTED ISSUE RELATING TO FREE SERVICES RELATED TO MRI AND CT SCAN TEST. T HEREAFTER AT PARA 8 OF HIS ORDER, THE LD. PR. CIT HAS HELD THAT THE ORDER DATED 29.09.2017 IS SET ASIDE ON THE ISSUE WITH THE DIRECTION TO THE AS SESSING OFFICER TO PASS THE SAME DENOVO IN THE CASE OF THE ASSESSEE IN ACCO RDANCE WITH LAW AFTER MAKING THE NECESSARY EXAMINATION AND VERIFICA TION REGARDING THE ISSUES UNDER DISCUSSION. WE THEREFORE, FIND THAT T HE DIRECTIONS BY THE LD. PR. CIT TO CARRY OUT THE FRESH ASSESSMENT IS LI MITED TO THE ISSUE MENTIONED AT PARA 6 OF HIS ORDER RELATING TO NON-VE RIFICATION OF RECEIPTS, DISCOUNT CLAIMED BY THE ASSESSEE AND RELATED FREE SERVICES PROVIDED BY THE ASSESSEE. THESE ISSUES ARE CLEARLY SUBJECT MATT ER OF LIMITED SCRUTINY AND THEREFORE, THE CONTENTION SO ADVANCED BY THE LD . AR CANNOT BE ACCEPTED. ITA NO. 262/JP/2020 SH. AYUB ALI VS. PR.CIT 13 14. THE SECOND CONTENTION WHICH HAS BEEN RAISED BY THE LD. AR IS THAT THE AO HAS EXAMINED THE EXPENSES CLAIMED IN TH E PROFIT AND LOSS ACCOUNT AND MADE CERTAIN DISALLOWANCES AND THESE DI SALLOWANCES WERE SUBJECT MATTER OF APPEAL AND SINCE THE LD. CIT(A) H AS DECIDED THE APPEAL OF ASSESSEE ON THE DISALLOWANCES OF EXPENSES CLAIMED IN THE P&L A/C, THEREFORE, WITH REFERENCE TO THE EXPENSES, THE ORDER OF AO HAS SINCE MERGED WITH THAT OF THE CIT(A) AND THEREFORE, THE LD PR.CIT CANNOT INVOKE THE REVISIONARY JURISDICTION U/S 263 OF THE ACT. WE HAVE GIVEN CAREFUL CONSIDERATION TO THE SAID CONTENTION ADVANCED BY THE LD AR BUT WE ARE NOT CONVINCED WITH THE SAME AND THE S AME CANNOT BE ACCEPTED. THE REASON FOR THE SAME IS THAT WHAT HAS BEEN DISALLOWED BY THE ASSESSING OFFICER IS 10% OF EXPENSES IN THE NAT URE OF ADVERTISEMENT EXPENSES, FUEL GENSET EXPENSES, LEGAL EXPENSES, MAI NTENANCE EXPENSES, MISC. OFFICE EXPENSES, SALES PROMOTION EX PENSES, STATIONERY AND PRINTING EXPENSES AND THE EXPENSES PERTAINING T O DISCOUNT WHICH IS SUBJECT MATTER OF SHOW CAUSE BY THE LD. PR. CIT WAS NOT AT ALL EXAMINED AND CONSIDERED AND FOR THAT MATTER, THE SUBJECT MAT TER OF THE ASSESSMENT ORDER, THEREFORE, IT CANNOT BE SAID THAT BY VIRTUE OF FILING AN APPEAL AGAINST DISALLOWANCES SO MADE BY THE ASSESSI NG OFFICER AND THE LD. CIT(A) HAS DECIDED THE APPEAL, THE ORDER OF THE AO HAS MERGED WITH THAT OF THE LD. CIT(A). IN OUR CONSIDERED VIEW, THE MATTER PERTAINING TO DISCOUNT CLAIMED BY THE ASSESSEE IN ITS PROFIT/LOSS ACCOUNT WAS NOT SUBJECT MATTER OF ASSESSMENT ORDER AS WELL AS THAT OF THE APPELLATE ORDER PASSED BY THE LD CIT(A) AND THEREFORE, WHERE THE MATTER WAS NOT CONSIDERED AND DECIDED BY THE LD CIT(A), THE THEORY OF MERGER AS CANVASSED BY THE LD A/R CANNOT BE ACCEPTED AND THE LD PR CIT IS WELL ITA NO. 262/JP/2020 SH. AYUB ALI VS. PR.CIT 14 WITHIN HIS JURISDICTION TO EXERCISE HIS POWERS ON S UCH MATTERS UNDER SECTION 263 OF THE ACT. 15. NOW COMING TO THE ISSUE OF MISMATCH OF RECEIPTS AS REFLECTED IN FORM 26AS AND WHAT HAS BEEN REPORTED BY THE ASSESSE E AND IN THIS REGARD, IT HAS BEEN CLAIMED THAT SINCE THE ASSESSEE HAS DECLARED RECEIPTS OF RS. 6,14,24,700/- AS AGAINST RECEIPT OF RS. 1,49,65,890/- REFLECTED IN FORM 26AS, THERE WAS NOTHING FOR THE A O TO ENTERTAIN ANY DOUBT AND ENQUIRE ABOUT THE RECEIPTS SO DECLARED BY THE ASSESSEE. TO OUR MIND, WHEN ONE OF THE REASONS FOR WHICH THE LIM ITED SCRUTINY WAS INITIATED WAS MISMATCH OF THE RECEIPTS, IN SUCH CIR CUMSTANCES, IT WAS REASONABLY EXPECTED AND INCUMBENT ON THE PART OF TH E ASSESSING OFFICER TO CARRY OUT DETAIL VERIFICATION AND SEEK DETAILS F ROM THE ASSESSEE REGARDING SUCH MISMATCH AND ONLY WHERE THE ASSESSIN G OFFICER WAS SATISFIED WITH THE RECONCILIATION OF RECEIPT FIGURE S, HE SHOULD HAVE ACCEPTED WHAT HAS BEEN DECLARED BY THE ASSESSEE IN TERMS OF HIS RECEIPTS. FURTHER, MERELY BECAUSE THE REPORTED REC EIPTS ARE MORE THAN WHAT HAS BEEN REFLECTED IN FORM 26AS, IT CANNOT BE PRESUMED THAT WHAT HAS BEEN REFLECTED IN FORM 26AS HAS BEEN INCLUDED I N THE RECEIPTS AS THE QUESTION IS NOT ABOUT THE SUM TOTAL OF RECEIPTS RATHER THE QUESTION IS ABOUT THE PARTICULAR RECEIPTS PERTAINING TO THE FIN ANCIAL YEAR WHICH ARE REFLECTED IN THE FORM 26AS ARE REPORTED TO TAX OR N OT. WE FIND THAT IT IS ONLY DURING THE COURSE OF REVISIONARY PROCEEDINGS T HAT SUCH RECONCILIATION HAS BEEN SUBMITTED BY THE ASSESSEE F OR THE FIRST TIME AND GIVEN THE FACT THAT THE ASSESSING OFFICER HAS NOT E XAMINED THE SAME, THE LD. PR. CIT HAS REMITTED THE MATTER TO THE ASSE SSING OFFICER FOR NECESSARY VERIFICATION. IT IS THEREFORE, A CASE OF COMPLETE LACK OF ENQUIRY ITA NO. 262/JP/2020 SH. AYUB ALI VS. PR.CIT 15 ON THE PART OF THE ASSESSING OFFICER OF THE ISSUE I N RESPECT OF WHICH THE CASE HAS BEEN SELECTED FOR LIMITED SCRUTINY AND GIV EN SUCH FAILURE ON THE PART OF THE ASSESSING OFFICER TO CARRY OUT THE NECE SSARY VERIFICATION AND EXAMINATION, THE ORDERS SO PASSED BY HIM IS CLEARLY ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND FIND ING OF THE LD. PR CIT ARE HEREBY SUSTAINED. 16. NOW COMING TO THE OTHER MATTER RELATING TO EXPE NDITURE OF RS. 1,19,35,260/- CLAIMED ON ACCOUNT OF DISCOUNT OF FERED BY THE ASSESSEE IN RELATION TO CT SCAN AND MRI TEST AND TH E RELATED FREE SERVICES PROVIDED BY THE ASSESSEE TO THE PATIENTS. WE FIND THAT EXCEPT FOR BRIEF REPLY CONTAINED AT ASSESSEES PAPER BOOK PAGE 42 WHERE THERE IS A MENTION OF PROVISION OF FREE SERVICE AND THE D ISCOUNT CLAIMED IN THE PROFIT AND LOSS ACCOUNT, THE ASSESSING OFFICER HAS NOT ENQUIRED ABOUT THE MATTER AND CARRY OUT ANY FURTHER VERIFICATION A ND EXAMINATION INSPITE OF THE FACT THAT THE SAME WAS SUBJECT MATTE R OF LIMITED SCRUTINY AS LARGE OTHER EXPENSES CLAIMED IN THE PROFIT/LOSS ACCOUNT AND IN SUCH CIRCUMSTANCES, IT WAS REASONABLY EXPECTED AND INCUM BENT ON THE PART OF THE ASSESSING OFFICER TO CARRY OUT DETAIL VERIFI CATION AND SEEK DETAILS FROM THE ASSESSEE REGARDING CLAIM OF DISCOUNT OF RS 1,19,35,260/- CONSTITUTING OVER 19% OF GROSS REC EIPTS OF RS 6,14,24,700/- AND ONLY WHERE THE ASSESSING OFFIC ER WAS SATISFIED WITH THE EXPLANATION AND DOCUMENTATION SO SUBMITTED BY THE ASSESSEE, HE SHOULD HAVE ACCEPTED THE SAID CLAIM OF DISCOUNT. THERE ARE NO DETAILS AVAILABLE ON THE ASSESSMENT RECORDS AS TO H OW SUCH DISCOUNTS HAVE BEEN CLAIMED IN THE PROFIT AND LOSS ACCOUNT, I N WHICH HEADS AND WHAT KIND OF FREE SERVICES ARE PROVIDED BY THE ASSE SSEE TO VARIOUS ITA NO. 262/JP/2020 SH. AYUB ALI VS. PR.CIT 16 PATIENTS IN RESPECT OF WHICH SUCH DISCOUNTS HAVE BE EN CLAIMED AND THE LINKAGE THEREOF WITH REVENUES SO OFFERED IN THE PRO FIT/LOSS ACCOUNT. WE FIND THAT IT IS A CASE WHERE THE ASSESSEE HAS MADE A BRIEF SUBMISSION BEFORE THE ASSESSING OFFICER AND THE SAME BEEN TAKE N ON FACE VALUE BY THE ASSESSING OFFICER WITHOUT ANY FURTHER EXAMINATI ON AND VERIFICATION. WE FIND THAT IT IS ONLY DURING THE COURSE OF REVISI ONARY PROCEEDINGS THAT CERTAIN EXPLANATION HAS BEEN GIVEN REGARDING PERCEN TAGE OF TESTS WHICH HAVE TO BE PROVIDED FREE OF COST BY THE ASSESSEE AN D HOW THE SAME HAS BEEN ACCOUNTED FOR IN THE PROFIT/LOSS ACCOUNT. WE FIND THAT EVEN SUCH EXPLANATION NEED TO BE CORROBORATED WITH ENTRIES IN THE BOOKS OF ACCOUNTS AND GIVEN THE FACT THAT THE ASSESSING OFFI CER HAS NOT EXAMINED THE SAME, THE LD. PR. CIT HAS REMITTED THE MATTER T O THE ASSESSING OFFICER FOR NECESSARY VERIFICATION. IT IS AGAIN A C ASE OF NO ENQUIRY TO OUR MIND AND NOT JUST LACK OF ENQUIRY, THEREFORE, THERE IS NO INFIRMITY IN THE FINDINGS OF THE LD. PR. CIT THAT THE AO HAS NOT VER IFIED THE VARIOUS DISCOUNTS CLAIMED AS TO WHETHER DISCOUNTS OF THE CL AIMED AS PER CONTRACT WITH RAJASTHAN MEDICARE RELIEF SOCIETY AND TO WHOM FREE SERVICE HAS BEEN RENDERED RELATING TO MRI AND CT SC AN AND HOW THE SAME HAS BEEN ACCOUNTED FOR IN THE PROFIT AND LOSS ACCOUNT. IN THIS REGARD, USEFUL REFERENCE CAN BE DRAWN TO OBSERVATIO NS OF THE COORDINATE BENCH IN CASE OF SUBHLAKSHMI VANIJYA (P.) LTD. VS C OMMISSIONER OF INCOME-TAX-I, KOLKATA, REPORTED IN 60 TAXMANN.COM 6 0 (KOLKATA - TRIB.) WHEREIN IT WAS HELD UNDER: IT IS IMPERATIVE FOR THE ASSESSING OFFICER TO COND UCT ENQUIRY TO SATISFY HIMSELF ABOUT THE GENUINENESS OF TRANSACTIO NS. SCOPE OF THE TERM 'ENQUIRY' CAN BE DIVERSE IN DIFFERENT CIRC UMSTANCES. THERE CANNOT BE STRAIGHT JACKET FORMULA TO POSITIVE LY CONCLUDE AS ITA NO. 262/JP/2020 SH. AYUB ALI VS. PR.CIT 17 TO CONDUCTING OR NON-CONDUCTING OF 'ENQUIRY' BY THE ASSESSING OFFICER. IT DEPENDS ON THE FACTS AND CIRCUMSTANCES OF EACH CASE. WHERE THE FACTS ARE JUST ORDINARY AND PRIMA FACIE T HERE IS NOTHING UNTOWARD THE RECORDED TRANSACTION, IN SUCH CIRCUMST ANCES, THE OBTAINING OF THE DOCUMENTS AND THE APPLICATION OF M IND THEREON, WITHOUT A FURTHER OUTSIDE ENQUIRY, MAY MEAN THAT TH E ASSESSING OFFICER DID CONDUCT ENQUIRY, LEAVING THE QUESTION O PEN AS TO WHETHER IT WAS A PROPER OR AN IMPROPER ENQUIRY. BUT , WHERE THE FACTUAL SCENARIO OF A CASE PRIMA FACIE INDICATES AB NORMALITIES AND CRY FOR LOOKING DEEP INTO IT, THEN A MERE COLLECTIO N OF DOCUMENTS CANNOT BE HELD AS CONDUCTING ENQUIRY, LEAVE ASIDE, ADEQUATE OR INADEQUATE. IN SUCH LATER CASES, ONLY WHEN THE ASSE SSING OFFICER, AFTER COLLECTION OF THE INITIAL DOCUMENTS, EMBARKS UPON FURTHER INVESTIGATION, THAT IT CAN BE SAID THAT HE INITIATE D ENQUIRY. WHERE THE FACTS OF A PARTICULAR TRANSACTION CRY HOARSE AB OUT ITS NON- GENUINENESS AND EVEN A CASUAL LOOK AT SUCH FACTS, P RIMA FACIE, DIVULGES FOUL PLAY, THEN THE ALARM BELL MUST RING I N THE MIND OF THE ASSESSING OFFICER FOR MAKING FURTHER EXAMINATIO N. COLLECTION OF PAPERS ON RECORD IN SUCH CIRCUMSTANCES CANNOT BE CONSTRUED AS CONDUCTING A PROPER ENQUIRY. IF IN SUCH CIRCUMSTANC ES, THE ASSESSING OFFICER SIMPLY GATHERS DOCUMENTS AND KEEP S THEM ON RECORD, THEN SUCH NOMINAL ENQUIRY FALLS WITHIN THE OVERALL CATEGORY OF 'NO ENQUIRY' BECAUSE OF THE INACTION ON THE PART OF THE ASSESSING OFFICER TO READ A WRITING ON THE WALL. 17. IN THE INSTANT CASE, WHERE THERE ARE DISCOUNTS CLAIMED TO THE EXTENT OF 19% AND ABOVE OF GROSS RECEIPTS SO REPORT ED AND THERE ARE NO ITA NO. 262/JP/2020 SH. AYUB ALI VS. PR.CIT 18 DETAILS AVAILABLE ON RECORD EXCEPT THE QUANTUM OF D ISCOUNT AND AN EXPLANATION THAT THE DISCOUNT HAS BEEN GIVEN TO THE PATIENTS AS PER AGREEMENT WITH PBM HOSPITAL AND MORE SO, WHEN THE M ATTER WAS SELECTED FOR THE PRECISE REASON OF EXAMINATION OF S UCH HUGE COMMISSION PAYMENTS, IT IS ORDINARILY EXPECTED THAT THE ASSESS ING OFFICER EXAMINE THESE TRANSACTIONS THOROUGHLY RATHER THAN JUST RELY ING ON THE INFORMATION SUBMITTED BY THE ASSESSEE COMPANY. IT IS NOT A QUESTION OF KIND AND EXTENT OF ENQUIRY AND HENCE, A DIFFERENCE OF APPROACH AND METHODOLOGY OF EXAMINATION OF A PARTICULAR TRANSACT ION AS DONE BY THE AO AND AS SUGGESTED BY THE LD PR CIT. NO DOUBT EVE RY ASSESSING OFFICER HAS HIS UNIQUE STYLE OF FUNCTIONING AND NO HARD AND FAST RULE CAN BE LAID DOWN AS TO HOW HE SHOULD CONDUCT THE ENQUIRY IN DIS CHARGE OF HIS STATUTORY FUNCTIONS. HOWEVER, WHERE THE FACTUAL SCE NARIO OF A CASE PRIMA FACIE INDICATES CLAIM OF HUGE DISCOUNT WHICH IS A MATTER OF LIMITED SCRUTINY AND THUS CRY FOR LOOKING DEEP INTO IT, THE N A MERE ACCEPTANCE OF AN EXPLANATION WITHOUT CONDUCTING ANY FURTHER VERIF ICATION AND EXAMINATION CANNOT BE HELD AS CONDUCTING AN ENQUIRY . IN OUR CONSIDERED VIEW, IT IS A CLEAR CASE OF NO ENQUIRY ON PART OF T HE ASSESSING OFFICER AND THE ORDER THUS PASSED IS CLEARLY ERRONEOUS AND PREJ UDICIAL TO THE INTEREST OF THE REVENUE. IN LIGHT OF SAME, WHERE THE AO SHUT S HIS EYES AND THE LD PCIT DISCOVERS THE GLARING DISCREPANCIES REGARDI NG CLAIM OF DISCOUNT EXPENSES DURING THE COURSE OF HIS EXAMINATION OF RE CORDS, WE DONOT THINK THERE IS ANY INFIRMITY OR ILLEGALITY IN LD PR CIT EXERCISING HIS REVISIONARY JURISDICTION U/S 263 OF THE ACT. 18. BEFORE PARTING, WE MAY ADD THAT WE HAVE ALSO G ONE THROUGH OTHER LEGAL AUTHORITIES ON THE SUBJECT AS BROUGHT T O OUR NOTICE BY THE LD ITA NO. 262/JP/2020 SH. AYUB ALI VS. PR.CIT 19 AR WHICH HAVE BEEN RENDERED IN THE CONTEXT OF SPECI FIC FACTS AND CIRCUMSTANCES OF THE INDIVIDUAL CASES, HOWEVER, THE SAME DOESNT SUPPORT THE CASE OF THE ASSESSEE COMPANY. 19. WE ACCORDINGLY UPHELD THE ORDER PASSED BY THE LD PR CIT U/S 263 OF THE ACT SETTING ASIDE THE ASSESSMENT ORDER PASSE D BY THE ASSESSING OFFICER FOR THE LIMITED PURPOSES OF EXAMINING THE I SSUES OF MISMATCH OF RECEIPTS AND DISCOUNTS CLAIMED IN THE PROFIT/LOSS A CCOUNT AND TO DECIDE THE SAME AS PER LAW AFTER MAKING NECESSARY EXAMINAT ION AND VERIFICATION. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15/02/2021. SD/- SD/- LANHI XKSLKBZ FOE FLAG ;KNO ( SANDEEP GOSAIN ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 15/02/2021. *SANTOSH VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SH. AYUB ALI, CHURU. 2. IZR;FKHZ@ THE RESPONDENT- PR.CIT-3, JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 262/JP/2020} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR